Oil prices drifted below $67 a barrel today in Asia but mostly held onto gains made overnight amid signs of an improving U.S. economy. Benchmark crude for September delivery was down 31 cents to $66.85 a barrel by midday Singapore time in electronic trading on the New York Mercantile Exchange. On Thursday, the contract added $1.76 to settle at $67.16.
Evidence that the recession-hit U.S. economy is strengthening has bolstered investor optimism and triggered a rally from $58.78 a barrel two weeks ago. While crude demand hasn’t rebounded yet, traders have begun to have more faith that consumption will eventually pick up.
“We haven’t seen demand increase yet, but all the good news about the economy seems to be adding fuel to the fire,” says Gerard Rigby, an energy analyst with Fuel First Consulting in Sydney. Investors were cheered by a National Association of Realtors report Thursday that said sales of previously occupied homes rose for the third month in a row. The last time that happened was in the middle of the housing boom in early 2004.
